Contracts
Right-of-First-Refusal Contracts – Definiteness as to Duration
MS Real Estate Holdings LLC v. Donald P. Fox Family Trust, 2015 WI 49 (filed 15 May 2015)
HOLDING: A right-of-first-refusal contract is definite as to duration when it specifies an event that triggers the right and requires the right holder to either exercise or waive the right within a specified period of time thereafter, even if the triggering event is not certain to occur.
SUMMARY: MS Real Estate, which operates a dairy farm, contracted with the Fox family in 1998 for a right of first refusal to purchase or lease farmland owned by the Foxes that is situated adjacent to the dairy farm. “A right of first refusal is a contractual right to be first in line should the opportunity to purchase or lease a property arises” (¶ 24).
Prof. Daniel D. Blinka, U.W. 1978, is a professor of law at Marquette University Law School, Milwaukee.
Prof. Thomas J. Hammer, Marquette 1975, is a law professor and Director of Clinical Education at Marquette University Law School, Milwaukee.
In litigation commenced in 2012 regarding the contract, the Foxes contended that the contract was indefinite and terminable at will. The circuit court concluded that the right-of-first-refusal contract was indefinite and subject to termination at will, by either party, after a reasonable period of time. This was so, the circuit court reasoned, because the right-of-first-refusal contract identified neither a specific duration for the contract nor an event terminating the contract that was certain to occur. In a published decision, the court of appeals reversed the circuit court. See 2014 WI App 84. The supreme court affirmed the court of appeals.
The sole issue before the supreme court was whether a triggering event uncertain to occur renders a right-of-first-refusal contract indefinite, thereby allowing a party to terminate the contract at will after a reasonable period of time.
In a unanimous decision authored by Justice Gableman, the court held that “a right of first refusal contract is definite as to duration when it specifies an event that triggers the right and requires the right holder to either exercise or waive the right within a specified period of time thereafter, even if the triggering event is not certain to occur. Therefore, the right of first refusal contract at issue here is not terminable at will after a reasonable period of time. Rather, by the terms of the contract, the right of first refusal continues until there is a sale of the property, either to MS Real Estate or to a third party in the event that MS Real Estate declines to exercise its right of first refusal to purchase, thereby waiving its right” (¶ 4).
Criminal Procedure
Evidence – Third-Party Defense
State v. Wilson, 2015 WI 48 (filed 12 May 2015)
HOLDING: The circuit court properly excluded evidence that a third party, not the defendant, committed the crime.
SUMMARY: A jury convicted Wilson of murdering his sometime love interest, Maric, and attempting to kill her friend, Willie, as the two sat in a car. At his 1993 trial, Wilson claimed he was not guilty and offered evidence that Willie killed Maric, who was pregnant, and staged the alleged attack on himself to shift blame to Wilson. The trial judge excluded the evidence. Wilson lost several postconviction motions before the court of appeals granted him a new trial, ruling that Wilson should have been permitted to present evidence that Willie was the shooter.
The supreme court reversed the court of appeals in a majority opinion, authored by Justice Prosser, that restates, reaffirms, and tries to clarify the Denny standard, which governs third-party defenses. See State v. Denny, 120 Wis.2d614, 357 N.W.2d12 (Ct. App. 1984). Evidence rules are circumscribed by the defendant’s constitutional right to present a defense (see ¶ 48). The supreme court reaffirmed “that the Denny test is the correct and constitutionally proper test for circuit courts to apply when determining the admissibility of third-party perpetrator evidence” (¶ 52). “We pause to note that each piece of a defendant’s proffered evidence need not individually satisfy all three prongs of the Denny test” (¶ 53).
The majority opinion expanded on each of the three Denny elements, which are summarized at paragraphs 56-59. First, the alleged third-party perpetrator must have a motive to commit the crime, which is simply one’s reason for doing something (see ¶ 62). Second, the alleged third-party perpetrator must have had the opportunity to commit the crime; it is the defense’s responsibility to show how the evidence is relevant to this opportunity (see ¶ 68).
Third, the “direct connection” element requires courts “not to look merely for a connection between the third party and the crime, they are to look for some direct connection between the third party and the perpetration of the crime” (¶ 71). “Mere presence at the crime scene or acquaintance with the victim, however, is not normally enough to establish direction [sic] connection” (¶ 72).
Applying these principles to the facts, the court held that Wilson failed to meet the Denny standard. The court expressed “regret” that the state conceded a direct connection, “inasmuch as it has necessitated discussion of factors under the heading of opportunity that arguably belong under direct connection – and vice versa” (¶ 73).
Justice Ziegler filed a comprehensive concurring opinion that emphasized that defendants must meet all three Denny elements. “Further, [the majority opinion] should not be read as suggesting that a third party’s presence at a crime scene can alone satisfy multiple prongs of this test, or that a third party’s unknown whereabouts during a crime can alone establish that the third party had an opportunity to commit the crime” (¶ 92).
Justice Abrahamson dissented, joined by Justice Bradley. They agreed with the court of appeals’ reasoning granting a new trial. The excluded evidence, they noted, affected Willie’s credibility as a witness for the state.
Municipal Law
Conditional-Use Permits – Rescission – Certiorari
Oneida Seven Generations Corp. v. City of Green Bay, 2015 WI 50 (filed 29 May 2015)
HOLDING: A city’s decision to rescind a conditional-use permit was not based on substantial evidence.
SUMMARY: A city granted a conditional-use permit to install a renewable energy facility. Later, however, the city voted to rescind the permit on the ground that the permit holder, Oneida Seven Generations Corp. (Oneida Seven), had made misrepresentations in its application. On certiorari review, the circuit court affirmed the city’s decision but the court of appeals reversed.
The supreme court affirmed the court of appeals in a majority opinion, authored by Justice Bradley, that is necessarily fact intensive. It is presumed that the city’s decision was valid. The court focused on the fourth element of certiorari review: “whether the evidence was such that it might reasonably make the order or determination in question” – and here the evidence involved the record made before the city regarding Oneida Seven’s alleged misrepresentations (see ¶¶ 41-42).
The court then explained the “substantial evidence standard” that governs municipal decisions like this one rescinding the conditional-use permit. Cities are not required to issue formal written decisions or explain their decision making (see ¶¶ 48-49). Sifting through records of the city’s various meetings, the court found no substantial evidence of alleged misrepresentations concerning emissions and hazardous materials (see ¶ 70), smokestacks (see ¶ 74), or the novelty of the technology to be used (see ¶ 75).
Chief Justice Roggensack dissented. She contended that the majority failed to respect the presumption of accuracy that attached to the city’s decisions and, instead, substituted its own view of the evidence (see ¶ 83).